Corporate Governance in the Caribbean Environment

1. Corporate Governance in the Caribbean Environment “The Caribbean Corporate Governance Forum” Trevor E Blake General Manager – ECSE

2. Corporate Governance • Corporate Governance is Important! • Strong governance framework facilitates economic development by • Strengthening market discipline • Improving business transparency • Enhancing Disclosure • Enhancing effective Regulation • Enhancing Corporate Social Responsibility

3. Corporate Governance • Strong governance framework assists governments and regulators to • monitor markets • identify risks • impose appropriate regulations that encourage growth and fair competition

4. Genesis of CCGF • ECSE/ECCB collaborate to launch Caribbean Corporate Governance Forum • Recognition that CG integral to development of money & capital markets • Calls for transparency and accountability • Emergence of international CG standards • Investors’ demands for governance

5. CCGF • Caribbean Corporate Governance Forum (CCGF) • A pan Caribbean forum committed to promote good CG standards in the region • Initiated to bring the Caribbean into global CG debate • Synthesis of ideas into regional consensus

6. CCGF Objectives • Raise CG profile in region • Identify relevant development issues • Assess current activities in region • To form a regional network • To establish regional consensus

7. CCGF Activities • 1st regional roundtable held Sept ’03 • 120 participants from 16 countries • Discussion areas included • global trends and implications for emerging economies • Caribbean corporate governance challenges • Institutional investor, regulatory, securities markets & corporate perspectives • governance issues for banks, nbfis, public companies, state corporations & SMEs

8. CCGF Activities • Creation of Caribbean Technical Working Group on CG (CTWG) • A grouping representative of various countries, sectors, industries and professions • to promote implementation of initiatives • determine priorities for implementation • Major achievement - • Draft Corporate Governance Principles for Caribbean Countries

9. CCGF Activities • 2nd regional roundtable in March ’05 • 170 participants from 20 countries • Focus on CG reform • Review CG Principles • Issued a Statement of Principles • CTWG to develop full set of Principles • Principles to be disseminated across region for comment • National consultations

10. Caribbean CG Principles • Principles focus on 6 broad areas • Objective & basis for Caribbean CG framework • Shareholder rights and key ownership functions • Equitable treatment of shareholders • Role of stakeholders • Disclosure and transparency • Board responsibilities

11. Caribbean CG Principles • Meet international standards • Focus on publicly held companies • Relevant to private, family & state enterprises • Encourage stakeholder rights • Recognise unique circumstances of region

12. Caribbean CG Principles • Suited to region’s state of development • Support integration movement • Non-binding and non-prescriptive • Basis for development of national and/or sector specific codes

13. CG Training Initiatives • Programmes to raise CG awareness and strengthen pool of directors • 2-day introductory Directors’ course & 1-day Chairpersons workshop held in June ’05, to promote • best practices • ethical, transparent practices • formal training • production of Personal Action Plans • Duties & responsibilities of Chairman

14. Way Forward • Principles placed on Agenda of CARICOM Heads of Government meeting • PM Anthony of St Lucia, responsible for Justice & Governance • National Adoption of the Corporate Governance Principles, in entire region • Development of country, sector and industry codes • Director Certification Training

15. Contact Details Eastern Caribbean Securities Exchange Ltd P O Box 94 Bird Rock, St Kitts Tel: 869 466 7192 Fax: 869-465-3798 E-mail: info@ecseonline.com Website: www.ecseonline.com CG page: www.ecseonline.com/corporategovernance.asp

16. Draft CG Principles • Principle I – Overall Objective • The corporate governance framework within the Caribbean should • encourage the development of transparent and efficient markets, • have its basis in the rule of law and ethical standards to foster the division of responsibilities among supervisory, regulatory, and enforcement bodies.

17. Draft CG Principles • Principle II – Shareholder Rights • The CG framework should protect and facilitate the exercise of shareholders rights. • Principle III – Equal Treatment of Shareholders • The CG framework should ensure the equitable treatment of all shareholders, including minority and foreign shareholders. • All shareholders should have the opportunity to obtain effective redress for violation of their rights.

18. Draft CG Principles • Principle IV – Rights of other Stakeholders • The CG corporate governance framework should • recognise the rights of stakeholders established by law or through mutual agreements • encourage active co-operation between entities, including family owned businesses and state-owned/controlled enterprises, in creating wealth, jobs, and the sustainability of financially sound enterprises.

19. Draft CG Principles • Principle V – Disclosure and Transparency • The corporate governance framework should ensure that timely and accurate disclosure is made on all material matters relating to the entity, including its • financial situation • performance • ownership • governance

20. Draft CG Principles • Principle VI – Board Responsibilities • The corporate governance framework should ensure • the strategic guidance of the entity • the effective monitoring of its management by the Board • the Board’s accountability to the entity and to stakeholders.